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Multi-State Cooperative Societies (Amendment) Bill, 2010c

The Multi State Cooperative Societies (Amendment) Bill,
2010 was introduced in the Lok Sabha on November 15, 2010 by the Minister of Agriculture,
Consumer Affairs, Food and Public Distribution.

The Bill amends the Multi State Cooperative Societies Act,
2002, which regulates multi-state cooperative societies i.e. cooperatives which
serves the interest of members in more than one state.This includes federal cooperative societies
whose membership is available only to a cooperative society or a multi-state
cooperative society and 21 national cooperative societies specified.

The central government may appoint a Central Registrar of
Cooperative Societies.A multi-state
cooperative society may be registered if its main object is to serve the
interest of members in multiple states, its bye-laws provide for social and
economic betterment of its members in accordance with the cooperative
principles.

The key amendments to the Act pertain to time limit for
disposal of application for registration, distribution of shares, constitution
of interim board, holding of elections, constitution of fund and dispute
settlement.

Disposal of
registration: The
Act states that the Central Registrar has to dispose off an application for
registration within four months.The
Bill adds that the time may be extended to five months after giving reasons in
writing.

According to the Act an application shall be refused
within four months.If it is not
disposed within that period, the application shall be deemed to have been
refused.The Bill increased the time
period to five months and adds that if an application is not disposed off
within the time period, it shall be deemed to have been accepted as a
member.

Distribution of
shares: The Act
states that the shares of a cooperative society are redeemable by a member
according to the provisions of the bye-laws.The redemption of shares shall on face value of shares.The Bill adds the proviso that the
cooperative society may refund the share capital held by the government. The
redemption of shares shall be on face value or book value of shares, whichever
is higher.

Constitution of
interim board:The Bill allows the Central Registrar to
declare any multi-state cooperative society as sick.The central government may, on the
recommendation of the Registrar appoint an interim board for a maximum of five
years.The Central Registrar can also
declare a cooperative to be viable within the five years. The board of
directors before the cooperative was declared sick shall be reinstated.

Elections: The Act states that elections
shall be conducted by the existing board.The Bill amends this to state that the central government may appoint a
Cooperative Election Authority to conduct elections in cooperative societies to
be prescribed.

Constitution of
Fund: The Bill
states that the central government shall set up the Cooperative Rehabilitation
and Reconstruction Fund.A cooperative
society shall credit 0.005% to 0.1% of its turnover to the fund, provided it
does not exceed Rs 3crores per year.

Dispute settlement:Under the Act, all disputes shall be referred to arbitration under the
Arbitration and Conciliation Act, 1996.The Bill amends it by stating that all disputes shall be referred to the
Central Registrar.If there is a
question as to whether a dispute touches the constitution or management of a
society, it shall be decided by the Central Registrar and shall not be
questioned by the court.